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UAE dollar peg to remain

Sheikh Mohammad says the UAE will avoid a GCC currency union until it is profitable.

June 26, 2010 12:34 by

The UAE has no plans to join a unified GCC single currency, reports Gulf News.

The paper reports on the exclusive interview granted by Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to the CNN news channel. In it, Sheikh Mohammad confirmed that the UAE dirham would remain pegged to the US dollar for the foreseeable future.

“The euro is in trouble and we thought of the Gulf currency and we said, well the UAE said, ‘not yet’. And I think they are right, until we are sure,” he said. “So therefore, now, we will not change anything for the time being until we see something solid really, and profitable.”

Six GCC countries have been in talks since 2001 to de-peg from the dollar and create a single currency, but the deadline for the single currency’s launch was set for 2010. Talks fell through after Riyadh was selected as the base for the future regional central bank of the GCC currency union, says the article. The UAE and Oman have subsequently opted out of the project. The new date for the European-style shared currency, now involving just four countries, is 2015.

In his interview, Sheikh Mohammad was also clear that Dubai would complete every project is has started.

“Everything we started, we are going to finish. Maybe some projects that we are thinking of or are in the books might [see a] delay of six months, eight months, one year. But the rest is going forward,” he said. “The worst is past and now we are looking for the next growth. We have to be ready for it and take the opportunity and get in before the rest of the world.”

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